Correlation Between Cathay Financial and IGATE Corp
Can any of the company-specific risk be diversified away by investing in both Cathay Financial and IGATE Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cathay Financial and IGATE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Financial Holding and IGATE Corp, you can compare the effects of market volatilities on Cathay Financial and IGATE Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cathay Financial with a short position of IGATE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Financial and IGATE Corp.
Diversification Opportunities for Cathay Financial and IGATE Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cathay and IGATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Financial Holding and IGATE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGATE Corp and Cathay Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cathay Financial Holding are associated (or correlated) with IGATE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGATE Corp has no effect on the direction of Cathay Financial i.e., Cathay Financial and IGATE Corp go up and down completely randomly.
Pair Corralation between Cathay Financial and IGATE Corp
If you would invest 1,434 in Cathay Financial Holding on January 25, 2024 and sell it today you would earn a total of 29.00 from holding Cathay Financial Holding or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.39% |
| Values | Daily Returns |
Cathay Financial Holding vs. IGATE Corp
Performance |
| Timeline |
| Cathay Financial Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IGATE Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cathay Financial and IGATE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Financial and IGATE Corp
The main advantage of trading using opposite Cathay Financial and IGATE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Financial position performs unexpectedly, IGATE Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IGATE Corp will offset losses from the drop in IGATE Corp's long position.| Cathay Financial vs. Sanlam Ltd PK | Cathay Financial vs. Ping An Insurance | Cathay Financial vs. CNO Financial Group | Cathay Financial vs. Genworth Financial |
| IGATE Corp vs. Zane Interactive Publishing | IGATE Corp vs. Meli Hotels International | IGATE Corp vs. Playa Hotels Resorts | IGATE Corp vs. Coursera |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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